|Selected news articles which highlight important policy issues.||
News: Weekly Archives
News for the week of 11-27-2006
Medicaid Spending Sees First Decline
USA Today reports that a combination of cost–management programs and the shift of drug costs for millions of poor elderly patients to Medicare has led to a decline in Medicaid spending for the first time "since the health program for the poor was created in 1965."
State and federal policymakers should use this unexpected windfall to consider bold experiments in Medicaid reform. For instance, Congress can borrow a page from welfare reform and "block grant" Medicaid funding to the states. This could trade off a temporary, but significant, increase in federal spending in return for a cap on future spending that would limit federal contributions to Medicaid. This would put much greater pressure on states to spend their Medicaid dollars effectively, and spur even more innovation at the state level. When the states effectively "own" Medicaid spending, they will find a way to control it.
The historic reversal will free up billions of dollars in state budgets. Medicaid has been the fastest–growing expense for states over the past 10 years.
The December issue of Governing magazine focuses on the growing phenomenon of small, retail health clinics that offer a wide range of basic health services at a fraction of the cost of a traditional doctor's office. This is just one small but powerful example of how market forces applied to health care can cut costs and improve consumer satisfaction.
There's a health care revolution underway. But it's not being fomented by doctors and hospitals or by governors and legislators. Rather, the seeds of a radical new approach to delivering health services are taking root deep in the heart of an industry whose life's blood is efficiency and affordability. Wal–Mart, Target, CVS and a host of other chain stores are setting up retail clinics: medical outposts that sit inside their stores, right alongside the shampoo, Pampers and ketchup.
The danger is that regulators and vested interests will see the growth of these clinics as a threat and move to burden them with expensive regulations that will drive up costs and reduce their attractiveness. Still, state legislators should look closely at these clinics and examine how they might be used to improve health care options for the Medicaid patients and the low–income uninsured.
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